================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q




               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 1997         Commission file number 1-27


                                   TEXACO INC.
           (Exact name of the registrant as specified in its charter)


          Delaware                                               74-1383447
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


        2000 Westchester Avenue
        White Plains, New York                                       10650
(Address of principal executive offices)                           (Zip Code)



        Registrant's telephone number, including area code (914) 253-4000




     Texaco Inc. (1) HAS FILED all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and
(2) HAS BEEN subject to such filing requirements for the past 90 days.

     As of July 31, 1997,  there were outstanding  264,107,386  shares of Texaco
Inc. Common Stock - par value $6.25.

================================================================================

<PAGE>

                         PART I - FINANCIAL INFORMATION

                      TEXACO INC. AND SUBSIDIARY COMPANIES
                        STATEMENT OF CONSOLIDATED INCOME
            FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 1997 AND 1996
                 (Millions of dollars, except per share amounts)

<TABLE>
<CAPTION>
                                                                                             (Unaudited)
                                                                        -------------------------------------------------
                                                                        For the six months          For the three months
                                                                          ended June 30,               ended June 30,
                                                                        --------------------        ---------------------
                                                                         1997           1996          1997           1996
                                                                         ----           ----          ----           ----
<S>                                                                    <C>            <C>           <C>            <C>    
         REVENUES
              Sales and services                                       $22,796        $20,876       $10,983        $10,817
              Equity in income of affiliates, interest, asset
                  sales and other                                          729            656           513            444
                                                                       -------        -------       -------        -------
                                                                        23,525         21,532        11,496         11,261
                                                                       -------        -------       -------        -------
         DEDUCTIONS
              Purchases and other costs                                 17,969         16,127         8,671          8,345
              Operating expenses                                         1,444          1,384           728            700
              Selling, general and administrative expenses                 792            799           395            399
              Maintenance and repairs                                      171            178            84             90
              Exploratory expenses                                         192            159            93             90
              Depreciation, depletion and amortization                     757            704           372            354
              Interest expense                                             203            221           102            108
              Taxes other than income taxes                                268            232           129            127
              Minority interest                                             37             33            16             17
                                                                       -------        -------       -------        -------
                                                                        21,833         19,837        10,590         10,230
                                                                       -------        -------       -------        -------

         Income before income taxes                                      1,692          1,695           906          1,031

         Provision for income taxes                                        141            620           335            342
                                                                       -------        -------       -------        -------


         NET INCOME                                                    $ 1,551        $ 1,075       $   571        $   689
                                                                       =======        =======       =======        =======

         Preferred stock dividend requirements                         $    28        $    29       $    14        $    14
                                                                       -------        -------       -------        -------

         Net income available for common stock                         $ 1,523        $ 1,046       $   557        $   675
                                                                       =======        =======       =======        =======

         Per common share (dollars)
              Net income                                               $  5.86        $  4.01       $  2.14        $  2.59

              Cash dividends paid                                      $  1.70        $  1.60       $   .85        $   .80

         Average number of common shares outstanding
              for computation of earnings per share
              (thousands)                                              260,080        260,709       260,090        260,764


<FN>
                                     See  accompanying   notes  to  consolidated financial statements.

</FN>
</TABLE>

                                      - 1 -

<PAGE>

<TABLE>
<CAPTION>
                      TEXACO INC. AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                    AS OF JUNE 30, 1997 AND DECEMBER 31, 1996
                              (Millions of dollars)
                                                                                         June 30,                December 31,
                                                                                           1997                     1996
                                                                                        -----------              ------------
                                                                                        (Unaudited)
                                                                                        -----------
<S>                                                                                          <C>                    <C>    
ASSETS
   Current Assets
      Cash and cash equivalents                                                              $   564                $   511
      Short-term investments - at fair value                                                      46                     41
      Accounts and notes receivable, less allowance for doubtful accounts
           of  $22 million and $34 million in 1997 and 1996, respectively                      4,524                  5,195
      Inventories                                                                              1,632                  1,460
      Deferred income taxes and other current assets                                             289                    458
                                                                                             -------                -------
           Total current assets                                                                7,055                  7,665

   Investments and Advances                                                                    5,438                  4,996

   Properties, Plant and Equipment - at cost                                                  34,462                 33,988
   Less - accumulated depreciation, depletion and amortization                                20,878                 20,577
                                                                                             -------                -------
      Net properties, plant and equipment                                                     13,584                 13,411

   Deferred Charges                                                                              964                    891
                                                                                             -------                -------

           Total                                                                             $27,041                $26,963
                                                                                             =======                =======

LIABILITIES AND STOCKHOLDERS' EQUITY
   Current Liabilities
      Short-term debt                                                                        $   472                $   465
      Accounts payable and accrued liabilities
         Trade liabilities                                                                     2,524                  3,472
         Accrued liabilities                                                                   1,279                  1,333
      Estimated income and other taxes                                                         1,156                    914
                                                                                             -------                -------
           Total current liabilities                                                           5,431                  6,184

   Long-Term Debt and Capital Lease Obligations                                                5,067                  5,125
   Deferred Income Taxes                                                                         809                    795
   Employee Retirement Benefits                                                                1,204                  1,236
   Deferred Credits and Other Noncurrent Liabilities                                           2,459                  2,593
   Minority Interest in Subsidiary Companies                                                     656                    658
                                                                                             -------                -------
           Total                                                                              15,626                 16,591
   Stockholders' Equity
      Market Auction Preferred Shares                                                            300                    300
      ESOP Convertible Preferred Stock                                                           464                    474
      Unearned employee compensation and benefit plan trust                                     (362)                  (378)
      Common stock (authorized: 350,000,000 shares, $6.25 par
           value; 274,293,417 shares issued)                                                   1,714                  1,714
      Paid-in capital in excess of par value                                                     608                    630
      Retained earnings                                                                        9,376                  8,292
      Currency translation adjustment                                                            (80)                   (65)
      Unrealized net gain on investments                                                          32                     33
                                                                                             -------                -------
                                                                                              12,052                 11,000
      Less - Common stock held in treasury, at cost                                              637                    628
                                                                                             -------                -------
         Total stockholders' equity                                                           11,415                 10,372
                                                                                             -------                -------

           Total                                                                             $27,041                $26,963
                                                                                             =======                =======


<FN>
                                        See  accompanying  notes to consolidated financial statements.
</FN>
</TABLE>

                                       -2-

<PAGE>

                      TEXACO INC. AND SUBSIDIARY COMPANIES
                 CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                              (Millions of dollars)
<TABLE>
<CAPTION>
                                                                                                    (Unaudited)
                                                                                              -----------------------
                                                                                                 For the six months
                                                                                                   ended June 30,
                                                                                              -----------------------
                                                                                              1997               1996
                                                                                              ----               ----
<S>                                                                                         <C>                <C>    
OPERATING ACTIVITIES
   Net income                                                                               $1,551             $1,075
   Reconciliation to net cash provided by (used in)
      operating activities
         Receivable for refund of IRS deposits                                                (700)                 -
         Depreciation, depletion and amortization                                              757                704
         Deferred income taxes                                                                 185                 55
         Exploratory expenses                                                                  192                159
         Minority interest in net income                                                        37                 33
         Dividends from affiliates, greater than (less than)
            equity in income                                                                  (144)               162
         Gains on asset sales                                                                 (287)               (37)
         Changes in operating working capital                                                  (89)                53
         Other - net                                                                           (52)              (103)
                                                                                            ------             ------
            Net cash provided by operating activities                                        1,450              2,101

INVESTING ACTIVITIES
   Capital and exploratory expenditures                                                     (1,451)            (1,231)
   Proceeds from sale of discontinued operations, net of
      cash and cash equivalents sold                                                             -                344
   Proceeds from sales of assets                                                               742                 87
   Sale of leasehold interests                                                                   -                147
   Purchases of investment instruments                                                        (608)              (970)
   Sales/maturities of investment instruments                                                  657                963
   Other - net                                                                                (142)                 5
                                                                                            ------             ------
            Net cash used in investing activities                                             (802)              (655)
FINANCING ACTIVITIES
   Borrowings having original terms in excess
      of three months
         Proceeds                                                                              221                113
         Repayments                                                                           (180)              (222)
   Net decrease in other borrowings                                                            (85)              (576)
   Purchases of common stock                                                                   (36)               (55)
   Dividends paid to the company's stockholders
      Common                                                                                  (441)              (416)
      Preferred                                                                                (28)               (29)
   Dividends paid to minority shareholders                                                     (40)               (35)
                                                                                            ------             ------
      Net cash used in financing activities                                                   (589)            (1,220)

CASH AND CASH EQUIVALENTS
      Effect of exchange rate changes                                                           (6)                (3)
                                                                                            ------             ------
      Increase during period                                                                    53                223
      Beginning of year                                                                        511                501
                                                                                            ------             ------
      End of period                                                                         $  564             $  724
                                                                                            ======             ======



<FN>

                                     See  accompanying   notes  to  consolidated financial statements.
</FN>
</TABLE>

                                       -3-

<PAGE>

                      TEXACO INC. AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1. Discontinued Operations
-------------------------------

On February  29,  1996,  Texaco  completed  the  disposition  of its  operations
classified as  discontinued  operations by completing  the sale of its worldwide
lubricant additives business to Ethyl Corporation for $136 million in cash and a
three-year note with a face amount of $60 million.

Revenues for the discontinued  operations  totaled $33 million for the first two
months of 1996, representing activities through the sale date.

Discontinued operations had no significant impact on 1996 results.


Note 2. Inventories
-------------------

The  inventories of Texaco Inc. and  consolidated  subsidiary  companies were as
follows:

<TABLE>
<CAPTION>
                                                                                                 As of
                                                                                --------------------------------------
                                                                                 June 30,                 December 31,
                                                                                   1997                       1996
                                                                                -----------               ------------
                                                                                (Unaudited)
                                                                                         (Millions of dollars)

<S>                                                                              <C>                        <C>   
     Crude oil                                                                   $  440                     $  296

     Petroleum products and petrochemicals                                          923                        904

     Other merchandise                                                               42                         58

     Materials and supplies                                                         227                        202
                                                                                 ------                     ------

          Total                                                                  $1,632                     $1,460
                                                                                 ======                     ======
</TABLE>


Note 3. Contingent Liabilities
------------------------------

Information  relative to commitments  and contingent  liabilities of Texaco Inc.
and  subsidiary  companies  is presented in Notes 14 and 16, pages 63-64 and 67,
respectively, of Texaco Inc.'s 1996 Annual Report to Stockholders.

With respect to the U.S. Internal Revenue Service (IRS) claims discussed in Note
16, page 67, of Texaco Inc.'s 1996 Annual Report to  Stockholders,  on April 21,
1997 the U.S.  Supreme  Court  decided not to review the  decisions  of the U.S.
Court of Appeals for the Fifth  Circuit and the U.S. Tax Court in the  so-called
"Aramco  Advantage"  case.  As a result of this  decision by the Supreme  Court,
Texaco  recognized  an after-tax  earnings  benefit of $488 million in the first
quarter 1997,  representing  the expected refund of the balance of deposits made
to the IRS in previous years for potential tax claims and accrued interest.  The
expected refund, including interest, exceeds $700 million. A significant portion
of the refund is expected to be received in 1997.

                                   ----------

In the company's opinion, while it is impossible to ascertain the ultimate legal
and financial liability with respect to contingent  liabilities and commitments,
including lawsuits,  claims,  guarantees,  taxes and regulations,  the aggregate
amount of such liability in excess of financial  reserves is not  anticipated to
be materially  important in relation to the consolidated  financial  position or
results of operations of Texaco Inc. and its subsidiaries.


                                      - 4 -
<PAGE>

Note 4. Caltex Group of Companies
---------------------------------

Summarized  unaudited  financial  information for the Caltex Group of Companies,
owned 50% each by subsidiaries of Texaco and Chevron  Corporation,  is presented
below and is reflected on a 100% Caltex Group basis:


<TABLE>
<CAPTION>

                                                                       For the six months       For the three months
                                                                         ended June 30,            ended June 30,
                                                                       ------------------       --------------------
                                                                        1997       1996          1997       1996
                                                                        ----       ----          ----       ----
                                                                                    (Millions of dollars)

<S>                                                                    <C>        <C>            <C>        <C>   
                  Gross revenues                                       $9,127     $9,160         $4,433     $4,999

                  Income before income taxes                           $  639     $1,724         $  319     $1,410

                  Net income                                           $  386     $  989         $  200     $  794

</TABLE>


On April 2, 1996, Caltex Petroleum Corporation  ("Caltex") completed the sale of
its 50% interest in Nippon Petroleum  Refining  Company,  Limited to its partner
Nippon Oil Company  for  approximately  $2  billion.  Caltex' net income for the
second  quarter of 1996  included a gain of $621  million  associated  with this
sale.

Effective  April 1, 1997,  Caltex' 40%  interest in its Bahrain  refining  joint
venture  (Bapco)  was  sold  to  the  Government  of the  State  of  Bahrain  at
approximately net book value.

On June 17,  1997,  Caltex  received  a claim  from the IRS for $292  million in
excise taxes,  plus  penalties and interest.  The IRS claim relates to crude oil
sales to Japanese  customers  beginning in 1980. Prior to 1980,  Caltex directly
supplied  crude oil to its Japanese  customers.  In 1980,  a Caltex  subsidiary,
Caltex Trading and Transport Corporation,  also became a contractual supplier of
crude  oil to the  Japanese  customers.  The IRS  position  is that  this  was a
transfer of property,  and thus  taxable.  Caltex is  challenging  the claim and
fully expects to prevail,  since the addition of another  supplying  company was
not a taxable  event.  Additionally,  Caltex  believes  the claim is based on an
overstated value. Finally,  Caltex disagrees with the imposition and calculation
of interest and penalties.  Just as Caltex  believes the  underlying  excise tax
claim is wrong,  Caltex also believes the related claim for  approximately  $140
million in penalties is equally  wrong and the IRS claim for almost $1.6 billion
in interest charges is flawed.  Caltex believes that the likelihood that it will
pay these charges is remote.

Note 5. Subsequent Events
-------------------------

On July 25, 1997, the company's Board of Directors  approved a two-for-one split
of the company's common stock effected in the form of a 100% stock dividend. The
additional  shares will be distributed on September 29, 1997, to shareholders of
record on September 11, 1997.

The  Board's  action  follows  the  approval by  shareholders  at the  company's
1997 Annual Meeting  to  increase  the  number of  authorized  common  shares to
700,000,000 and halve the par value to $3.125 per share.











                                      - 5 -
<PAGE>

The proforma effect of the stock split would be as follows:


<TABLE>
<CAPTION>
                                                                       For the six months       For the three months
                                                                         ended June 30,            ended June 30,
                                                                       ------------------       --------------------
                                                                        1997       1996          1997       1996
                                                                        ----       ----          ----       ----

<S>                                                                   <C>        <C>            <C>        <C>    
Average number of common shares outstanding for
   computation of earnings per share (thousands)

            As reported                                               260,080    260,709        260,090    260,764
            Split basis                                               520,161    521,418        520,180    521,528

Net income per common share

            As reported                                                 $5.86      $4.01          $2.14      $2.59
            Split basis                                                 $2.93      $2.01          $1.07      $1.29

</TABLE>


The company also  announced an increase in its quarterly  dividend on its common
stock to 90 cents per share from 85 cents per share, on a pre-split basis.  This
quarterly cash dividend will be payable on September 10, 1997 to shareholders of
record on August 5, 1997.



                              * * * * * * * * * * *



In the determination of preliminary and unaudited  financial  statements for the
six-month  and  three-month  periods  ended  June 30,  1997 and  1996,  Texaco's
accounting policies have been applied on a basis consistent with the application
of such  policies in  Texaco's  financial  statements  issued in its 1996 Annual
Report  to  Stockholders.   In  the  opinion  of  Texaco,  all  adjustments  and
disclosures  necessary  to present  fairly the  results of  operations  for such
periods have been made. These adjustments are of a normal recurring nature.  The
information  is subject to year-end  audit by  independent  public  accountants.
Texaco makes no forecasts  or  representations  with respect to the level of net
income for the year 1997.







                                      - 6 -

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

RESULTS OF OPERATIONS
---------------------

Total  worldwide  net income for Texaco Inc. and  subsidiary  companies  for the
second  quarter of 1997 was $571 million,  or $2.14 per share,  as compared with
$689  million,  or $2.59 per share,  for the second  quarter of 1996.  Total net
income for the first six months of 1997 was $1,551 million,  or $5.86 per share,
as compared with $1,075 million, or $4.01 per share, for the first six months of
1996. Both years included special items.

Net income before special items for the second quarter of 1997 was $440 million,
or $1.64 per share, as compared with $465 million,  or $1.73 per share,  for the
second  quarter of 1996.  For the first half of 1997,  net income before special
items was $932 million,  or $3.48 per share,  as compared with $851 million,  or
$3.15 per share, for the first half of 1996.

Volume growth in both the upstream and downstream and a continuing commitment to
manage per barrel operating  expenses were key drivers of Texaco's strong second
quarter performance.  However,  abundant supplies of crude oil and products have
put downward pressure on commodity prices and downstream margins.

During the second quarter of 1997:

          o Worldwide daily production rose four percent.
          o Branded gasoline sales in the U.S. increased two percent.
          o Year-to-date capital and exploratory expenditures grew 25 percent to
            $1.8 billion.
          o Expenses  per  barrel  continued  to  be  managed  at  levels  below
            inflation.

In Texaco's  upstream  business,  the  successful  push to increase  production,
especially  in the United  Kingdom and  Partitioned  Neutral Zone, is key to the
company's  results.  But, while  production  rose in this year's second quarter,
unanticipated  start-up problems slowed expected  production in the U.K. Captain
Field. Overall, earnings for this year's second quarter were slightly below last
year.  Commodity  prices  this  year  were  lower,  and  the  company  increased
exploratory  spending  focused on  expanding  its  reserve  base.  International
downstream  results were higher this year.  Earnings  grew in Latin  America and
margins in Europe  improved over  depressed  1996 levels.  However,  in the U.S.
downstream,  1997  results  were  significantly  lower.  A  surplus  of  refined
products, especially on the West Coast, and lackluster demand in the marketplace
drove prices downward,  negating the effects of improved refining operations and
higher gasoline sales volumes.

In this  year's  second  quarter,  increased  capital and  exploratory  spending
accompanied the company's  announcements  of natural gas discoveries in Oklahoma
and New Mexico,  government  approval of  Texaco's  Hamaca  heavy oil project in
Venezuela,  the  completion  of a significant  geothermal  well in Indonesia and
expansions of the company's  natural gas liquids and refined  products  pipeline
systems.  Also,  negotiations  with Shell continued to combine major elements of
Texaco's U.S. downstream operations.

Results for 1997 and 1996 are  summarized  in the  following  table.  Details on
special items are included in the functional analysis which follows this table.

<TABLE>
<CAPTION>

                                                                                            (Unaudited)
                                                                         -------------------------------------------------
                                                                         For the six months           For the three months
                                                                           ended June 30,                ended June 30,
                                                                         ------------------           --------------------
                                                                         1997           1996          1997           1996
                                                                         ----           ----          ----           ----
                                                                                       (Millions of Dollars)
<S>                                                                     <C>            <C>             <C>         <C>    
Net income before special items                                         $  932         $  851          $440        $  465
                                                                        ------         ------          ----        ------
Gains on major asset sales                                                 174            224           174           224
Financial reserves for various issues                                      (43)             -           (43)            -
U.S. tax issue                                                             488              -             -             -
                                                                        ------         ------          ----        ------
                                                                           619            224           131           224
                                                                        ------         ------          ----        ------
Total net income                                                        $1,551         $1,075          $571        $  689
                                                                        ======         ======          ====        ======

</TABLE>

                                      - 7 -
<PAGE>


                               OPERATING EARNINGS


PETROLEUM AND NATURAL GAS
     EXPLORATION AND PRODUCTION
        United States

Exploration  and production  earnings in the U.S. for the second quarter of 1997
were $189 million, as compared with $243 million for the second quarter of 1996.
For the first six months of 1997 and 1996,  earnings  were $500 million and $510
million, respectively. Results for 1997 included a second quarter special charge
of $43 million  for the  establishment  of  financial  reserves  for royalty and
severance  tax  issues.  Excluding  the special  charge,  results for the second
quarter and first six months of 1997  totaled  $232  million  and $543  million,
respectively.

In the U.S. upstream, lower commodity prices caused second quarter 1997 earnings
to be below last year's level.  Excess  supplies in the global market led to the
price declines. Average realized crude oil and natural gas prices for the second
quarter of 1997 were $16.95 per barrel and $2.02 per thousand  cubic feet (MCF),
respectively,  which were $.35 per barrel and $.05 per MCF, respectively,  lower
than the same period last year.

Earnings  before special items for the first half of 1997 were six percent above
1996. The effects of higher commodity prices in the first quarter  significantly
exceeded the second quarter price declines. Lower gas trading results and higher
exploratory activity, mostly in the Gulf of Mexico, partly negated the impact of
higher prices.

Liquids and natural gas production in 1997 was maintained at prior-year  levels.
Continued  success  in  enhancing  liquids   production  from  existing  fields,
particularly in the Gulf of Mexico and Louisiana,  offset declines from maturing
fields.

         International

Exploration and production  earnings  outside the U.S. for the second quarter of
1997 were $240 million,  as compared with $103 million for the second quarter of
1996. For the first six months of 1997 and 1996,  earnings were $396 million and
$233 million,  respectively.  Results for 1997 included  second quarter  special
gains of $161  million  from the sales of a 15 percent  interest  in the Captain
Field in the U.K.  North Sea,  an interest in  Canadian  gas  properties  and an
interest in an Australian pipeline system.  Excluding the special gains, results
for the second quarter and first six months of 1997 totaled $79 million and $235
million, respectively.

In the international upstream,  higher production had a favorable impact on 1997
results. Total daily production in 1997 increased 11 percent over last year. New
production  from the  Captain  Field in the U.K.  North Sea  contributed  to the
increase.  Also, new activities  coming onstream late in 1996 in the Wafra field
in the Partitioned  Neutral Zone,  between Saudi Arabia and Kuwait, in the Bagre
Field  offshore  Angola  and in the  Danish  North  Sea  led to  higher  liquids
production.  Natural gas  production  in 1997  benefited  from a full six months
operations  at the Dolphin  Field in Trinidad and from the Chuchupa "B" Field in
Colombia.  Crude oil prices  were lower in 1997.  Average  crude oil prices were
$16.91 per barrel for the second  quarter,  $1.50 per barrel  below  comparative
1996 prices.

Significantly   higher  activity  levels  associated  with  Texaco's  aggressive
exploration  program contributed to lower overall results for the second quarter
of 1997.  Additionally,  earnings for 1997 included lower gas trading results in
the U.K.











                                      - 8 -
<PAGE>


     MANUFACTURING, MARKETING AND DISTRIBUTION

         United States

Manufacturing,  marketing and  distribution  earnings in the U.S. for the second
quarter of 1997 were $100 million,  as compared with $144 million for the second
quarter of 1996.  For the first six months of 1997 and 1996,  earnings were $106
million  and $148  million,  respectively.  Results  for 1997  included a second
quarter  special  gain of $13 million  from the sale of credit card  operations.
Excluding the special gain,  results for the second quarter and first six months
of 1997 totaled $87 million and $93 million, respectively.

In the U.S.  downstream,  weak West Coast margins  caused lower  earnings in the
second quarter and first half of 1997.  West Coast product prices were higher in
1996 from  shortages  caused by regional  refining  problems and new  California
gasoline  formulation  requirements.  Throughout  the first half of 1997 branded
gasoline sales volumes increased;  however, surplus supplies led to a squeeze on
West Coast gasoline margins.  Additionally,  while refinery  operations improved
this year,  refinery  upsets in late 1996 and early 1997  caused  higher  repair
costs and lower  product  yields in the first  quarter of 1997.  Lower crude oil
trading  margins,  cleanup  costs  associated  with  the Lake  Barre,  Louisiana
pipeline break and the absence of earnings from a PO/MTBE business sold on March
1, 1997, also lowered 1997 results.  Partially offsetting these negative factors
were improved Gulf Coast sour crude cracking margins.

         International

Manufacturing,  marketing  and  distribution  earnings  outside the U.S. for the
second quarter of 1997 were $132 million,  as compared with $304 million for the
second quarter of 1996. For the first six months of 1997 and 1996, earnings were
$236 million and $396 million,  respectively.  Results for 1996 included a first
quarter  special  gain of $224  million  for Caltex'  sale of its  interest in a
Japanese  affiliate,  including  the tax on the  portion  of the  sale  proceeds
distributed  to the  shareholders.  Excluding the special gain,  results for the
second  quarter  and  first six  months of 1996  totaled  $80  million  and $172
million, respectively.

In the  international  downstream,  both  second  quarter  and  first  half 1997
operating  earnings before special items were higher.  Improved refining margins
in the U.K. and Panama drove  earnings  upward this year.  In addition,  expense
control at all refineries  coupled with improved marketing margins and increased
sales volumes in Latin America and the U.K. contributed to the higher earnings.
Competitive  pressures  in the  Norwegian  marketplace  led to lower  results in
Scandinavia.

Lower  results in the Caltex area of  operations  partially  offset the improved
earnings in Latin America and Europe.  Higher  operating  earnings in Korea were
more than offset by currency impacts attributable to the South African Rand, and
operational  difficulties  at the  Thailand  refinery  that  adversely  affected
product yields.

NONPETROLEUM

Nonpetroleum  earnings  for the  second  quarter  of 1997  were $1  million,  as
compared  with $3  million  for the second  quarter  of 1996.  For the first six
months of 1997 and 1996, earnings were $13 million and $5 million, respectively.















                                      - 9 -
<PAGE>

                         CORPORATE/NONOPERATING RESULTS

Corporate  and  nonoperating  charges  for the  second  quarter of 1997 were $91
million,  as compared  with  charges of $108  million for the second  quarter of
1996. Corporate and nonoperating  earnings for the first six months of 1997 were
$300 million,  as compared with charges of $217 million for the first six months
of 1996.  Results  for the first six  months of 1997  included  a first  quarter
special benefit of $488 million  associated with the "Aramco Advantage" U.S. tax
case.  Excluding this benefit,  corporate and nonoperating  charges totaled $188
million for the first six months of 1997.

Reduced  interest  expense due to lower debt levels and slightly  lower interest
rates led to a  comparative  improvement  in second  quarter and first half 1997
results.  Additionally,   these  results  included  higher  gains  on  sales  of
marketable securities held for investment by insurance operations.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Texaco's cash, cash equivalents and short-term  investments totaled $610 million
at June 30, 1997, as compared with $552 million at year-end 1996.  Cash provided
by  operating  activities  of $1.5  billion  for the first  six  months of 1997,
supplemented by proceeds of $742 million from the sale of  nonstrategic  assets,
exceeded  outlays  of  $1.5  billion  relative  to  the  company's  capital  and
exploratory program, $509 million for payment of dividends to common,  preferred
and minority interest shareholders and $80 million for the reduction of debt and
purchases of common stock.

At June 30, 1997,  Texaco's  ratio of total debt to total  borrowed and invested
capital was 31.5%,  as compared with 33.6% at year-end  1996.  This  improvement
reflected  strong  operating  results,  the favorable  resolution of the "Aramco
Advantage"  case and a reduction  in debt to $5.5  billion  from $5.6 billion at
year-end 1996. At June 30, 1997,  Texaco's  long-term debt included $968 million
of debt  scheduled  to mature  within one year,  which the  company has both the
intent and the ability to refinance on a long-term basis. The company maintained
a revolving credit facility with  commitments of $1.5 billion,  which was unused
at both June 30, 1997 and at year-end 1996.

During the first  quarter of 1997,  the  company  issued  $150  million of 7.09%
Noncallable  Notes Due 2007.  Proceeds  from this offering were used for working
capital, retirement of existing debt and other general corporate purposes.

As of June 30,  1997,  $199  million has been  expended  under the $500  million
common stock  repurchase  program  announced  in 1995,  of which $36 million was
expended  during  the  first six  months  of 1997.  The  company  will  continue
repurchasing shares from time to time based on market conditions.

During the first six months of 1997, the company  completed  various  sales,  as
follows:

       o In March,  Texaco exercised an option to terminate a lease  arrangement
         and obtained ownership of the assets used in its propylene oxide/methyl
         tertiary  butyl  ether   (PO/MTBE)   business.   Concurrent  with  this
         transaction, Texaco sold the PO/MTBE business to a Huntsman Corporation
         affiliate  for cash and  preferred  stock.  The cash  proceeds  of $512
         million were used to  substantially  offset the cost of exercising  the
         option.  The preferred  stock,  with a stated value of $65 million,  is
         mandatorily redeemable in eleven years.

       o During April,  the company  finalized the sale of a 15% interest in its
         U.K.  North  Sea  Captain  Field to an  affiliate  of  Korea  Petroleum
         Development  Corporation for approximately $210 million.  Of this total
         amount, $20 million was received during the first quarter of 1996.

       o In  April,  the  company  sold   its  interests  in  certain  producing
         operations in Canada for approximately $80 million.

       o In May, the company  completed  the  previously  announced  sale of its
         credit card  services  unit,  including  its  portfolio of  proprietary
         credit  card  accounts   receivable,   to   Associates   First  Capital
         Corporation,  an indirect  majority-owned  subsidiary of the Ford Motor
         Company.  As a result of this sale,  Texaco  received  cash proceeds of
         approximately  $300 million for its  proprietary  credit card  accounts
         receivable and associated processing assets.


                                     - 10 -
<PAGE>

On April 21, 1997,  the United  States  Supreme  Court decided not to review the
decisions  of the U.S.  Court of Appeals for the Fifth  Circuit and the U.S. Tax
Court in the so-called "Aramco  Advantage" case. In previous years,  Texaco made
payments,  with associated  interest,  to the IRS for potential tax claims. As a
result of the Supreme  Court action,  Texaco  expects a refund in excess of $700
million,  which  represents the remaining  balance of these deposits and accrued
interest.  A  significant  portion of the refund is  expected  to be received in
1997.

On July 25, 1997,  Texaco's Board of Directors  approved a two-for-one  split of
the company's  common stock effected in the form of a 100% stock  dividend.  The
additional  shares will be distributed on September 29, 1997, to shareholders of
record on  September  11, 1997.  The company  also  announced an increase in its
quarterly  dividend on its common  stock to 90 cents per share from 85 cents per
share,  on a pre-split  basis,  representing  an increase of 5.9  percent.  This
quarterly cash dividend will be payable on September 10, 1997 to shareholders of
record on August 5, 1997.

On August 5,  1997,  the  company  issued  $200  million  of 3.50%  Cash-Settled
Convertible  Notes Due 2004.  Concurrently with the issuance of these Notes, the
company entered into an arrangement that effectively  converts its interest cost
relative to these Notes into a LIBOR-based floating rate and fixes Texaco's cost
of future  conversions  at the face  amount  of the  Notes.  Proceeds  from this
offering will be used for working capital, retirement of existing debt and other
general  purposes.  On August 12,  1997  Texaco  repurchased  certain  equipment
leasehold  interests  in  conjunction  with  a  sale/leaseback  arrangement  for
somewhat  less than the proceeds  received.  Through  June 30, 1997,  Texaco had
received  $509  million and an  additional  $20 million in July,  1997 for those
leasehold interests.

The company considers it financial  position  sufficient to meet its anticipated
future financial requirements.

EMPLOYEE SEVERANCE PROGRAM
--------------------------

On October 30, 1996,  Texaco  announced a  companywide  realignment  designed to
enhance  the  company's  ability  to  grow  existing  and new  businesses.  This
realignment,   coupled  with  other  organizational  enhancements  such  as  the
consolidation  of  operations,  is  designed  to  stimulate  growth and  improve
efficiencies in both support and operating  functions.  However,  it is expected
that some overlapping  activities will be eliminated  resulting in the reduction
of some 750 employees  worldwide by the end of 1997.  An after-tax  provision of
$56  million was  recorded  in the fourth  quarter of 1996 to cover the costs of
employee separations,  including employees of affiliates. Through June 30, 1997,
approximately  750 employees have been terminated  with a related  commitment to
severance payments of $30 million after-tax. Of this commitment, payments of $18
million have been made and charged  against the reserve as of June 30, 1997. The
remaining reserve balance will be used for ongoing employee  separation benefits
relating principally to affiliates, for which Texaco is responsible.

NEW ACCOUNTING STANDARD
-----------------------

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards (SFAS) 128, Earnings per Share. Under SFAS 128,
companies  currently  required to report primary and fully diluted  earnings per
share (EPS), will instead report basic and diluted EPS, respectively. Currently,
primary EPS considers the average  number of common shares  outstanding  and the
potential  dilution  that would  result if  conversion  rights  associated  with
certain outstanding  securities were exercised.  Fully diluted EPS considers all
potentially dilutive securities. Basic EPS, which will replace primary EPS, does
not consider any potential dilution. Diluted EPS is essentially similar to fully
diluted EPS.

Texaco must adopt SFAS 128 for its fiscal year 1997 financial statements and, at
that  time,  restate  the per share  amounts  of prior  periods.  Amounts  to be
reported as basic and diluted EPS in accordance  with the new Statement will not
differ significantly from previously reported primary and fully diluted EPS.









                                     - 11 -
<PAGE>


CAPITAL AND EXPLORATORY EXPENDITURES
------------------------------------

Capital and exploratory  expenditures,  including equity in such expenditures of
affiliates,  were $1,798  million for the first half of 1997,  as compared  with
$1,437 million for the same period of 1996.  Expenditures for the second quarter
of 1997 amounted to $999 million  versus $796 million for the second  quarter of
1996.

Texaco's  continued  focus on high impact  projects in the U.S.  upstream,  both
onshore  and  offshore,   generated   increased   exploration   and  development
expenditures  in the  first  half of  1997.  In the  deepwater  Gulf of  Mexico,
platform  construction  and  development  drilling  continued  in the Arnold and
Petronius fields while  delineation  drilling is underway in the Fuji and Gemini
prospects.  Aggressive  drilling  and  development  programs in the  traditional
offshore  shelf area and onshore,  as well as enhanced  oil recovery  efforts in
California, also increased investments. Construction continued during the second
quarter on a jointly  owned natural gas pipeline and  processing  complex in the
Gulf  Coast  area.  There  was,  however,  reduced  spending  this year on lease
acquisitions compared to significant expenditures in 1996.

Internationally,  upstream  investments  for the first half of 1997 exceeded the
aggressive  activity level of 1996. Higher  expenditures  reflected  development
work in the U.K. North Sea, principally for continuing activities in the Mariner
and Galley fields. Exploration and development activities continued in China and
Indonesia.

Downstream  expenditures in the U.S.  declined  slightly in 1997. While spending
for refinery upgrades and marketing investment decreased, construction continued
on a major  crude oil  pipeline  that will  service  new  deepwater  and subsalt
production in the Gulf of Mexico.

Internationally,  downstream spending increased due to marketing investments and
initiatives in the  Asia-Pacific  area by Texaco's  affiliate,  Caltex Petroleum
Corporation,  principally  in Hong  Kong.  Texaco  also  continued  to invest in
selected Latin American growth markets.



































                                     - 12 -
<PAGE>


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings
-------------------------

Reference is made to the  discussion of Contingent  Liabilities in Note 3 to the
Consolidated  Financial  Statements  of this Form 10-Q,  Item 1 of Texaco Inc.'s
Form 10-Q for the quarterly  period ended March 31, 1997 and to Item 3 of Texaco
Inc.'s  1996  Annual  Report  on Form  10-K,  which are  incorporated  herein by
reference.

Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------

The Annual Meeting of the  Stockholders of Texaco Inc. was held on May 13, 1997,
for the purpose of (1) electing four directors, (2) approving the appointment of
auditors for the year 1997,  (3) amending the  Certificate of  Incorporation  to
increase the number of authorized shares and reduce the par value, (4) approving
the Incentive  Compensation  Program of 1997 and (5) acting on three stockholder
proposals  concerning the establishment of a shareholders'  advisory  committee,
classification  of  the  Board  of  Directors  and  diversity  on the  Board  of
Directors. The following summarizes the stockholder voting results:

Stockholders  elected Dr.  Franklyn G. Jenifer and Messrs.  Willard C.  Butcher,
Edmund M.  Carpenter  and  Thomas A.  Vanderslice,  each for a  three-year  term
expiring at the 2000 Annual  Meeting.  The vote  tabulation for each  individual
director was as follows:
<TABLE>
<CAPTION>
                  Director                         Shares Voted for         % of Vote         Shares Withheld
                  --------                         ----------------         ---------         ---------------
<S>                                                   <C>                     <C>                <C>      
                  Willard C. Butcher                  231,977,862             97.9               5,005,642
                  Edmund M. Carpenter                 232,455,636             98.1               4,527,868
                  Franklyn G. Jenifer                 232,168,142             98.0               4,815,362
                  Thomas A. Vanderslice               232,359,728             98.0               4,623,776
</TABLE>

Directors continuing in office were Dr. John Brademas,  Mrs. Robin B. Smith, and
Messrs.  Peter I. Bijur,  Michael C. Hawley,  Allen J. Krowe,  Thomas S. Murphy,
Charles H. Price II,  William C. Steere and William  Wrigley.  Mr.  Krowe,  upon
reaching  the  company's  mandatory  retirement  age,  retired  from the company
effective  July 1, 1997 and resigned from the Board of Directors  also effective
July 1, 1997.

The  appointment of Arthur Andersen LLP to audit the accounts of the company and
its subsidiaries  for the fiscal year 1997 was approved.  Of those shares voted,
234,279,670  shares,  or 99.3% voted in favor,  1,796,133  shares,  or .7% voted
against, and 934,700 shares abstained.

The proposal to amend the Certificate of Incorporation as set forth in Item 3 of
the 1997 Proxy  Statement,  was  approved.  Of those shares  voted,  217,469,056
shares, or 92.5% voted in favor,  17,656,932 shares, or 7.5% voted against,  and
1,857,511 shares abstained.

The proposal to approve the Incentive Compensation Program of 1997 was approved.
Of those shares voted,  173,228,950 shares, or 83.4% voted in favor,  34,517,604
shares, or 16.6% voted against and 2,763,394 shares abstained.

Stockholders rejected the three stockholder proposals.  The proposal relating to
the establishment of a shareholders' advisory committee, as set forth in Item 5
of the 1997 Proxy Statement,  was rejected by a vote of 195,647,188  shares,  or
95.4%,  against.  Shares voting for the proposal totaled  9,439,366  shares,  or
4.6%, and 5,423,800 shares abstained.

The proposal relating to the  classification  of the Board of Directors,  as set
forth  in  Item 6 of  the  1997  Proxy  Statement,  was  rejected  by a vote  of
111,287,711 shares, or 53.7%,  against.  Shares voting for the proposal  totaled
96,017,962 shares, or 46.3%, and 3,264,677 shares abstained.

The proposal  relating to diversity on the Board of  Directors,  as set forth in
Item 7 of the  1997  Proxy  Statement,  was  rejected  by a vote of  182,925,982
shares,  or 89.3%,  against.  Shares voting for the proposal totaled  21,940,019
shares, or 10.7%, and 5,643,949 shares abstained.

                                     - 13 -
<PAGE>

Item 5. Other Information
-------------------------
<TABLE>
<CAPTION>
                                                                                             (Unaudited)
                                                                         -------------------------------------------------
                                                                         For the six months           For the three months
                                                                           ended June 30,                ended June 30,
                                                                         ------------------           --------------------
                                                                          1997          1996           1997          1996
                                                                          ----          ----           ----          ----
                                                                                        (Millions of dollars)
<S>                                                                     <C>            <C>           <C>            <C>   
FUNCTIONAL NET INCOME
---------------------
Operating earnings
   Petroleum and natural gas
      Exploration and production
         United States                                                  $  500         $  510        $  189         $  243
         International                                                     396            233           240            103
                                                                        ------         ------        ------         ------
           Total                                                           896            743           429            346
                                                                        ------         ------        ------         ------
      Manufacturing, marketing and distribution
         United States                                                     106            148           100            144
         International                                                     236            396           132            304
                                                                        ------         ------        ------         ------
           Total                                                           342            544           232            448
                                                                        ------         ------        ------         ------

           Total petroleum and natural gas                               1,238          1,287           661            794

   Nonpetroleum                                                             13              5             1              3
                                                                        ------         ------        ------         ------
           Total operating earnings                                      1,251          1,292           662            797

Corporate/Nonoperating                                                     300          (217)           (91)          (108)
                                                                        ------         ------        ------         ------

           Total net income                                             $1,551         $1,075        $  571         $  689
                                                                        ======         ======        ======         ======


CAPITAL AND EXPLORATORY EXPENDITURES -
--------------------------------------
     INCLUDING EQUITY IN AFFILIATES
     ------------------------------
   Exploration and production
         United States                                                  $  781         $  621        $  429         $  355
         International                                                     546            450           264            243
                                                                        ------         ------        ------         ------
           Total                                                         1,327          1,071           693            598
                                                                        ------         ------        ------         ------
   Manufacturing, marketing and distribution
         United States                                                     152            156            92             79
         International                                                     308            201           207            114
                                                                        ------         ------        ------         ------
           Total                                                           460            357           299            193
                                                                        ------         ------        ------         ------

   Other                                                                    11              9             7              5
                                                                        ------         ------        ------         ------
           Total, including equity in affiliates                        $1,798         $1,437        $  999         $  796
                                                                        ======         ======        ======         ======

   Texaco Inc. and subsidiary companies
   Exploratory expenses included above:
         United States                                                  $   76         $   67        $   34         $   44
         International                                                     116             92            59             46
                                                                        ------         ------        ------         ------
           Total                                                        $  192         $  159        $   93         $   90
                                                                        ======         ======        ======         ======
</TABLE>












                                     - 14 -
<PAGE>

<TABLE>
<CAPTION>
                                                                                             (Unaudited)
                                                                         -------------------------------------------------
                                                                         For the six months           For the three months
                                                                           ended June 30,                ended June 30,
                                                                         --------------------         --------------------
                                                                         1997            1996         1997            1996
                                                                         ----            ----         ----            ----
OPERATING DATA - INCLUDING INTERESTS
------------------------------------
     IN AFFILIATES
     -------------
Exploration and Production
--------------------------

<S>                                                                     <C>            <C>           <C>            <C>   
United States
-------------
     Net production of crude oil and natural
         gas liquids (000 BPD)                                             385            387           385            391
     Net production of natural gas - available
         for sale (000 MCFPD)                                            1,666          1,666         1,677          1,685
                                                                        ------         ------        ------         ------
     Total net production (000 BOEPD)                                      663            665           665            672

     Natural  gas sales (000 MCFPD)                                      3,700          3,120         3,561          3,007
     Natural gas liquids sales - (including
         purchased LPGs) (000 BPD)                                         188            216           172            188

     Average U.S. crude (per bbl)                                       $18.29         $16.90        $16.95         $17.30
     Average U.S. natural gas (per mcf)                                 $ 2.36         $ 2.11        $ 2.02         $ 2.07
     Average WTI (Spot) (per bbl)                                       $21.38         $20.74        $19.97         $21.73
     Average Kern (Spot) (per bbl)                                      $15.07         $15.18        $14.11         $15.46

International
-------------
     Net production of crude oil and natural
         gas liquids (000 BPD)
         Europe                                                            116            115           118            110
         Indonesia                                                         147            140           153            144
         Partitioned Neutral Zone                                           92             74            94             75
         Other                                                              67             60            68             60
                                                                        ------         ------        ------         ------
              Total                                                        422            389           433            389
     Net production of natural gas - available
         for sale (000 MCFPD)
         Europe                                                            207            192           172            180
         Colombia                                                          156            113           173            111
         Other                                                              93             60            83             66
                                                                        ------         ------        ------         ------
              Total                                                        456            365           428            357

     Total net production (000 BOEPD)                                      498            450           504            449

     Natural gas sales (000 MCFPD)                                         574            459           528            442
     Natural gas liquids sales - (including
         purchased LPGs) (000 BPD)                                          93            106           104             95

     Average International crude (per bbl)                              $18.22         $18.25        $16.91         $18.41
     Average U.K. natural gas (per mcf)                                 $ 2.73         $ 2.56        $ 2.59         $ 2.48
     Average Colombia natural gas (per mcf)                             $ 1.09         $  .93        $ 1.12         $  .92

</TABLE>






                                     - 15 -

<PAGE>

<TABLE>
<CAPTION>
                                                                                            (Unaudited)
                                                                         -------------------------------------------------
                                                                         For the six months           For the three months
                                                                           ended June 30,                ended June 30,
                                                                         -------------------          --------------------
                                                                         1997           1996          1997            1996
                                                                         ----           ----          ----            ----
OPERATING DATA - INCLUDING INTERESTS
------------------------------------
     IN AFFILIATES
     -------------

Manufacturing, Marketing and Distribution
-----------------------------------------

<S>                                                                      <C>            <C>            <C>           <C>  
United States
-------------
     Refinery input (000 BPD)
         Subsidiary                                                        413            399           418            403
         Affiliate - Star Enterprise                                       332            317           328            318
                                                                         -----          -----         -----          -----
              Total                                                        745            716           746            721

     Refined product sales (000 BPD)
         Gasolines                                                         505            491           512            507
         Avjets                                                             92            129            94            127
         Middle Distillates                                                215            212           216            205
         Residuals                                                          72             62            59             62
         Other                                                             119            133           117            133
                                                                         -----          -----         -----          -----
              Total                                                      1,003          1,027           998          1,034

International
-------------
     Refinery input (000 BPD)
       Europe                                                              341            337            335           340
       Affiliate - Caltex                                                  411            383            414           266
       Latin America/West Africa                                            59             62             55            66
                                                                         -----          -----          -----         -----
         Total                                                             811            782            804           672

     Refined product sales (000 BPD)
       Europe                                                              495            473            494           467
       Affiliate - Caltex                                                  574            626            561           539
       Latin America/West Africa                                           391            391            406           396
       Other                                                                55             74             74            73
                                                                         -----          -----          -----         -----
     Total                                                               1,515          1,564          1,535         1,475


</TABLE>







                                     - 16 -
<PAGE>

Item 6. Exhibits and Reports on Form 8-K
----------------------------------------

(a)  Exhibits

     --      (3) Copy  of  By-Laws  of  Texaco Inc., as amended to and including
                 July 25, 1997.

     --    (4.1) Form  of  First Supplemental Indenture, dated as of January 31,
                 1990,  among  Texaco  Capital  Inc.,  Texaco Inc. and The Chase
                 Manhattan  Bank  (National  Association),  as  Trustee.   (This
                 document was previously filed with the Securities and  Exchange
                 Commission,  File  No.  1-27,  as Exhibit 4.1 to Texaco Capital
                 Inc.'s Registration Statement  on  Form S-3  (Registration Nos.
                 33-33303 and 33-33303-01)  on  February 1, 1990,  and  is being
                 filed herein only for EDGAR purposes.)

     -- (4.1(a)) Form   of   First   Supplement    to  the   First  Supplemental
                 Indenture,  dated as of October 11,  1990.  (This  document was
                 previously  filed with the Securities and Exchange  Commission,
                 File No.  1-27,  as  Exhibit  4.1(a) to Texaco  Inc.'s  Current
                 Report on Form 8-K, dated October 12, 1990 and filed on October
                 15, 1990, and is being filed herein only for EDGAR purposes.)

     -- (4.1(b)) Form  of  Second   Supplement   to   the   First   Supplemental
                 Indenture,  dated as of August 5, 1997,  including Forms of the
                 Note  representing  Texaco  Capital  Inc.'s $200 million  3.50%
                 Guaranteed Cash-Settled Convertible Notes Due 2004.

     --     (11) Computation  of  Earnings  Per  Share of Common Stock of Texaco
                 Inc. and Subsidiary Companies.

     --     (12) Computation  of Ratio of Earnings to Fixed Charges of Texaco on
                 a Total Enterprise Basis.

     --     (20) Copy  of  Texaco  Inc.'s  Annual  Report  on  Form 10-K for the
                 fiscal  year ended  December  31, 1996  (including  portions of
                 Texaco Inc.'s Annual Report to Stockholders  for the year 1996)
                 and a copy of Texaco Inc.'s  Quarterly  Report on Form 10-Q for
                 the quarterly  period ended March 31, 1997, as previously filed
                 by the Registrant with the Securities and Exchange  Commission,
                 File No. 1-27.

     --     (22) Information  relative  to  the  various  matters submitted to a
                 vote of security holders are described on pages 9 through 27 of
                 the 1997 Proxy Statement of Texaco Inc., relating to the Annual
                 Meeting of  Stockholders  held on May 13, 1997,  as  previously
                 filed  by the  Registrant  with  the  Securities  and  Exchange
                 Commission, File No. 1-27.

     --     (27)  Financial Data Schedule.

(b)  Reports on Form 8-K:

     During the second quarter of 1997, the Registrant filed a Current Report on
     Form 8-K for the following events:

     1.   April 22, 1997 (date of earliest event reported: April 21, 1997)

          Item 5. Other Events -- reported that Texaco (1) announced that it had
          been  notified  that the U.S.  Supreme Court has decided not to review
          the  decisions of the U.S.  Court of Appeals for the Fifth Circuit and
          the U.S. Tax Court in the so-called  "Aramco  Advantage"  case and (2)
          issued an Earnings  Press Release for the first  quarter 1997.  Texaco
          appended  as  exhibits  thereto a copy of the Press  Release  entitled
          "Texaco  Advised  Supreme Court Will Let Stand  Favorable  Decision in
          `Aramco  Advantage'  Case,"  dated April 21, 1997 and "Texaco  Reports
          Significant  Increase in Net Income: First Quarter 1997 Earnings Reach
          $980 Million," dated April 22, 1997, respectively.

     2.   June 19, 1997 (date of earliest event reported: June 17, 1997)

          Item 5. Other  Events --  reported  that the  Registrant's  50-percent
          owned affiliate,  Caltex Petroleum Corporation,  received a claim from
          the U.S.  Internal  Revenue  Service for $292 million in excise taxes,
          plus interest and penalties.

                                     - 17 -
<PAGE>

                                   SIGNATURES
                                   ----------



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.




                                                                Texaco Inc.
                                                           ---------------------
                                                               (Registrant)




                                                    By:         R.C. Oelkers
                                                           ---------------------
                                                               (Comptroller)




                                                    By:           R.E. Koch
                                                           ---------------------
                                                           (Assistant Secretary)




Date:    August 13, 1997
         ---------------








                                      - 18-